Syria’s economy contracts as violence surges: IMF

Syrians walk through a bazaar in the old city of Damascus on April 10. Syria's economy is expected to contract significantly in 2012 due to 14 months of violence and sanctions, according to a top official at the International Monetary Fund. (AFP Photo/Louai Beshara)

Syria’s economy is expected to contract significantly in 2012 due to 14 months of violence and sanctions, a top official at the International Monetary Fund said on Wednesday.

“We do expect contraction in GDP (Gross Domestic Product) this year,” the head of the IMF’s Middle East, North Africa, Gulf and Central Asia Department, Masood Ahmed, told AFP, adding the drop was expected to be “significant”.

The IMF is not providing figures on the Syrian economy due to lack of data amid the political uncertainty.

Ahmed cited unrest and EU sanctions on Syrian oil exports as main causes of deterioration in the economy.

“We do have limited information,” he said, adding the IMF had not visited Syria since a year ago.

“The unrest and the conflict by themselves, apart from the impact from sanctions, have affected the economic activity, both through uncertainty and through trade and FDI (foreign direct investment) inflows,” he added.

The EU in September banned crude oil imports from Syria. That was a severe blow to Damascus, which traditionally sells 95 percent of its crude exports to the European Union, providing one third of its hard currency earnings.

Switzerland also joined the oil ban, slapping an embargo on the import, sales and transport of Syrian oil and oil products.

Ahmed did not provide a figure on economic performance in 2011 but said there was probably an “economic stagnation,” pointing out that sanctions were imposed towards the end of the year.

But he noted that many sectors of the economy, as well as government revenues, had been hit hard by sanctions and the violence, in which thousands of people have been killed since anti-regime protests broke out in March 2011.